CEO says one focus will be growth in Australia, where it purchased Grupo Primo Smallgoods
SAO PAULO, Brazil (Reuters) — Brazilian meat packer JBS will have sufficient cash flow in 2015 to bankroll potential acquisitions, says chief executive officer Wesley Batista.
However, for the time being the company plans to focus on consolidating gains from recent takeovers.
In late March, JBS completed the US$1.125 billion buyout of Australian meat company Grupo Primo Smallgoods, which will give it a base to boost sales in the Asia-Pacific region.
Batista said the company has no plans “to establish operations” in Asia, and instead will focus on organic growth in South America, North America and Australia.
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He also ruled out issuing new shares in the U.S. and Brazilian markets for the near future.
Pessimism about economic growth in Brazil has intensified in the past months, but Batista said it had not been reflected in the company’s domestic sales.
However, he said a recovery in the company’s export of Brazilian beef is not likely this year.
“The greatest pressure over margins have come from the drop in exports, especially to Russia and Venezuela, due to the drop in oil prices and the devaluation of their currencies,” Batista said.
However, he said local beef de-mand and prices are expected to remain firm in the near term because of tight live cattle supplies.
JBS, which was founded in Brazil’s interior west-central farm belt, has become the world’s largest beef exporter over the past decade.
The company has also expanded into poultry and pork production with the help of acquisitions in the United States and Australia and financing from Brazil’s BNDES national development bank.
